Ever get a pizza and think the guy who made it for you would be a great fit for your nonprofit board? Dennis Kilfeather thinks you should, and not just because he used to be a chef. The pizza guy, Kilfeather says, can bring valuable assets to a board that is probably struggling.
Kilfeather, an accountant and supervisor at Lear & Pannepacker, will present “Show Me the Money: Nonprofit Finance & Accounting Best Practices” as the kickoff to a pilot series for nonprofit organizations by VolunteerConnect on Monday, September 24, from 6 to 8 p.m. at the Nassau Club of Princeton. Cost $50. Visit www.VolunteerConnectNJ.org.
Kilfeather really did start out as a chef. He grew up in northeast Philadelphia, where his father was a defense contractor and his mother a legal secretary. He nevertheless ended up in the kitchen and stayed there as he worked his way through college. He earned his bachelor’s in accounting and MBA from Holy Family University and promptly traded his apron for a suit at his job at Lear & Pannepacker. He has been there for about 10 years.
Kilfeather doesn’t see it as much of a stretch to go from cooking to accounting. Both involve a lot of planning and a lot of step-by-step building. Cooking or accounting, though, Kilfeather says he has long had a soft spot for the types of things nonprofit organizations do.
“I spend about half my time as a volunteer,” Kilfeather says. He was a Big Brother for a few years and still volunteers at a food pantry, but he also works a lot through VolunteerConnect. This vantage point among other volunteers and nonprofit managers, he says, has given him an appreciation for how and why people get into and run organizations.
But it has also given him a feel for what is missing amid their idealism. Most nonprofits, he says, “are program heavy. They’re running, programmatically, very well.”
What they’re not doing well, often, is business. People tend to start nonprofits for ideological reasons, with a mission firmly in mind. Consequently, he says, they put together boards full of people who know how to be excellent youth coordinators or urban planners or activists, but often have no practical business experience.
So let’s revisit that pizza shop. That guy who runs the place, and has been running it successfully for a decade and a half, knows how to run a business, Kilfeather says. He knows about supplies, cash flow, budgets, expenses — all those things that every business owner needs to know.
Nevertheless, that guy is rarely thought of as someone with a valuable set of business skills, he says. And he is even less frequently seen as someone who could lend a solid, critical eye to a nonprofit organization promoting, say, health and wellness among senior citizens.
But that’s a mistake to overlook him. Same is true for the “little old lady running the corner store,” Kilfeather says. “An organization could use her on their board.”
One of the things holding up people from asking her, though, is the simple fact that a lot of nonprofits view themselves as fundamentally different from businesses that exist to make money.
“The problem is, from a historical standpoint, nonprofit organizations don’t run like for-profit organizations,” he says. “We really need to take a for-profit approach to nonprofits.”
In other words, if you’re running a nonprofit, look at the money the way a for-profit business does, because you’re going to spend it on a lot of the same things. Nonprofits might rely on volunteer help and not have to worry about paying taxes, but they still need to pay people who actually work there for a living, still need to cover utilities and rent, still need to advertise and market, still need materials and supplies.
And here’s something else: “Nonprofits do have to put money aside for a rainy day, and I don’t see that happening” Kilfeather says. That lack of respect for the times people stop giving so much can be costly for nonprofits and often is the reason one folds, he says. “A lot of nonprofits live grant-to-grant, paycheck-to-paycheck,” he says.
On the upside, Kilfeather says nonprofits appear to be getting the message. He says it’s a late aftershock of the financial crisis: giving has gone down in a lot of sectors in the last five years. Bigger, though, is the effect wrought by shrinking grant pools at the state level. New Jersey has been dealing with budget issues that have made grant dollars less available, and nonprofits who relied on them are starting to take seriously the effects of not having saved for the rain, he says.
One solution is to find a financial person for your nonprofit’s board, someone who will look dispassionately at the money and see it as a revenue source that can be built upon, Kilfeather says. That could be an MBA or accountant, but it could be the pizza guy. The point to keep in mind is that you want someone who will want to support your mission but not get hung up on the program.
Kilfeather is aware that nonprofits have advantages (like not having to pay taxes) that are offset by some notable disadvantages compared to for-profit enterprises. The main one is that the pizza guy or the little old lady on the corner can always go to the bank and borrow more money, maybe get a line of credit. A nonprofit usually doesn’t have that option because it often has no collateral.
“A lot of nonprofits rent their space or work out of donated space,” he says.
There’s no secret formula, of course. But Kilfeather says nonprofits can give themselves a big leg up if they can succinctly define their mission and what they’re lacking in the same sentence. And, of course, there’s also the fact that getting more money will always be a gamble.
But saving really does pay off, Kilfeather says. Small amounts can add up quickly and come in handy during the lean times, if you’re putting something aside regularly.
“It’d be ideal if you could put aside six months of payroll, but it might take you three years to do that,” he says. But consistency wins. “A thousand dollars a month might not seem like a lot, but 36 months later, we have $36,000 and we can work with that.”